How Santander’s using first-party data to increase loyalty

Security concerns have shackled the use of customer data at banks. At Santander UK, however, restrictions are loosening after its marketing team proved that being adventurous with people’s data can deliver value.

To convince its board to let marketing take responsibility for creating value out of its banking data, Santander tested various data-led strategies for months with its agency Carat. Santander insists it’s not too far from being able to build strategies around an “audience of one,” effectively switching from trying to reach unknown audiences with rudimentary targeting to speaking directly to people it knows.

Santander’s confidence stems from what it saw during those tests, the first of which mixed a small portion of its CRM data with similar audience data from Facebook earlier this year to understand why customers weren’t downloading its mobile app and what would convince them to use it regularly. The results were “staggering”, the bank claimed, but it declined to share exact figures due to commercial reasons. However, Santander was able to apply those findings to parts of its search, social and programmatic activity, the top-line results of which it was able to share.

Over the period it ran the trial, loyalty, which Santander defines as someone who has an account and at least one other banking product, jumped by 12 percent, according to the bank. The bank’s Net Promoter Score, an industry-wide gauge of customer loyalty that’s notoriously tricky to increase, rose to its highest in 17 years, according to Carat. The bank revealed account satisfaction increased 10 percent, which in turn had the secondary effect of the bank achieving its highest ever positive sentiment at almost 90 percent.

Andy Freeman, Santander UK’s head of social media, digital and marketing transformation, admitted at an Oystercatchers event last week that fundamental changes were made. Briefs were no longer sent to agencies from different parts of Santander’s marketing and digital teams. Instead, “we just put everyone together around shared objectives, shared KPIs and a budget in the middle of the table,” he said. The nature of those briefs also changed, moving to being more customer-loyalty driven. “We needed to evolve our business model to be less about acquisition and more about retention, customer satisfaction, loyalty and cross-selling products, which from a marketing perspective means looking at the way we work with our agencies,” he said.

The tighter focus on retention also meant moving away from what the bank called the “big, molasses segments” like first-time house buyers. Speaking at the same Oystercatchers event, Carat UK CEO Rick Hirst explained how the richer breadth and depth of data allowed the bank to reach people at specific parts of the customer journey with content that “was exactly relevant to them at the time.” He added: “We went from having two to three pieces of content around mortgages that we would segment and normally send out to creating over 50 pieces [for] those people who were at specific parts of their journey.”

A switch like this can be labor-intensive. To ease the burden on the marketing team, which is undergoing revamped training programs to understand the data, the bank introduced a tool that would allow the marketing team to deliver more relevant messages by scraping together first-, second- and third-party data. The bank trained its staffers on the data in part because it feared they would get too wrapped up in the data without training. “You have to have the right people to make sure that they’re guiding the data and are making sure that everything the strategy is delivering against are business objectives,” Freeman said.

Santander’s burgeoning confidence with data partially stems from the revised Payment Services Directive (PSD2) legislation that will force banks across Europe to open their data up to third parties. While Freeman conceded PSD2 was a threat, he also said it could be an opportunity because “you can go to another bank or another service provider and potentially aggregate all your financial services into one place.”

“Brands like Airbnb, Uber, John Lewis and Amazon are defining the experiences of other brands,” Freeman said. “If I can order a book on Amazon Prime in the morning and can get it that same evening, then why would I want to wait 10 days for a bank card? Those sorts of relationships we’re having with these brands are making people start to question why they have to have a traditional relationship with their bank.”

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